Credit Unions

[VideoTechMan]

Ive been a member at my local union for almost a year now.....thought ive had credit issues in the past, I do have to say that my score has improved a bit since last year. I had thought about wanting to apply for a personal loan for a new laptop, but hesitant to apply in fear of getting rejected. You know how banks and credit unions have no problem turning you down and having to wait 45 years before you are worthy of credit again. My thing is, should I try to go for a loan or just do it the old fashioned way and save up for several months for it? Usually by the time I have the money saved up the model I want is always discontinued all of a sudden, and cant get it anymore. Sometimes I hate the credit system. Anyone ever deal with something like this?

VTM

[Capmaster]

It depends on how badly you want/need it. If it's something you can do without nicely until you have the cash, then by all means don't borrow. Debt has a way of blindsiding you and if that first loan is approved, you might see that as a "precedent" and won't hesitate and think it through before you borrow again. It does get easier with practice

[Ziffelpig]

CU's generally are more strict in their lending criteria than commercial banks, however in most cases that is to your advantage as they are really only interested in loaning to people who have the means to make repayment while not markedly decreasing their asset to debt ratio through the term of the loan. Credit is an essential part of everyday life whether you use it or not and it's prudent to work at improving your credit rating, I'd go for the personal loan, it has more effect on your credit rating and the interest rate is much lower than a credit card, not to mention the extra shares(for you) the loan generates in the CU.

[indolikaa]

When I lived in New Mexico, I was a member of the New Mexico Educator's Federal Credit Union. I closed my account there when I moved, and I'll count that as one of the biggest mistakes I've ever made in my financial career.

The only saving grace is that my local Wells Fargo branch takes personal banking to the highest levels. There isn't a single financial service they can't offer me. I am content to have my money there, although I much prefer the non-profit operating principles of my old credit union.

What I would recommend is that you go see a Credit Union representative and bring a letter with you explaining three things:

* What happened in your previous credit problems,
* Why it happened,
* What you've done to correct the problem.

You'd be surprised at what kind of doors that will open.

[VideoTechMan]

What I would recommend is that you go see a Credit Union representative and bring a letter with you explaining three things:

* What happened in your previous credit problems,
* Why it happened,
* What you've done to correct the problem.

You'd be surprised at what kind of doors that will open.

I may look into that. Since last summer, I have gone to measures to pull up my own score from the credit bueraus to see what my score was, and have worked to have some of the inaccurate negative stuff that was on there removed. Of course as of now some of the items are 7 years old, if not older and hopefully have been deleted. I also managed to open 2 new credit cards (and thats all i have too, dont need anymore)....one secured and the other partially and have not been late on either cards since i had opened them last summer.....so I would think that would count for something. Maybe if i do a letter and explain how my credit was in the past and what I am doing now, there could possibly be a chance. It sure would be nice to pay cash for everything and never have to be bothered with credit....but only drawback is that it wont help the rating.

VTM

[shoozleboy]

If you have direct deposit of your paycheck into your credit union, that helps them in deciding on the loan as well.... agree to an automatic withdrawl for payment on your paydays and that helps them feel better about extending a loan to questionable borrowers.

I have financed just about any large purchase (home, 6 different cars, unsecured loan, and even my first credit card) through my credit union in the last 17 years.... I let them get their payment right from my direct deposit everytime. I don't have to write a check or worry about missing a payment (as long as I have my job).

If they give you the loan and you make timely payments - it will help your score big time. When I was 18 and started getting credit, I struggeled with the discipline of sitting down each payday and writing out my bills... I wanted to spend the money on something else, so I would stretch the payments as long as I could. It didn't help the credit rating and I was stressed beyond belief when the car would brake down or something....

When I went to my credit union and laid it all out to them, they put me on the right path and I have had no problems since then.

Talk to your CU reps, they can help.

[djKale]

For a laptop, I'd say save the money and forget about taking out a loan. It looks like you are starting to use credit exactly the way it was not meant to be used. What happens when your transmission goes out and you need $2000 to fix it? You could run up those cards really fast and be back in the same (sinking) boat again. I say keep your credit clean for those high ticket, must have items and emergency situations.

Kale

[flaninacupboard]

i can't believe you have problems with credit over there - they're giving cash away over here! i repeatedly get offers for loans and cards, they never stop.

[VideoTechMan]

For a laptop, I'd say save the money and forget about taking out a loan. It looks like you are starting to use credit exactly the way it was not meant to be used. What happens when your transmission goes out and you need $2000 to fix it? You could run up those cards really fast and be back in the same (sinking) boat again. I say keep your credit clean for those high ticket, must have items and emergency situations.

Kale

For that price, its better to buy a new car anyway lol. However, I maintain my own car so im not really worried about repairs as much, because I do my own work on my car; I dont rely on mechanics. And with me being an 18 wheeler commercial driver and being out on the road during the week, I do have a legitimate reason to purchase a better laptop out here on the road so that I can do my video work without having to wait until the end of the week to get to my home puter (2 days isnt really enough, esp with the scope of the projects I have planned).

Believe me, if I had an everyday normal 8 hour job like most people have, and was home everyday, I would have no need for another laptop lol. I have made alot more wise decisions since I have decided to work on getting my credit back on track, and I feel this may help even more.

VTM

[Craig Tucker]

Is it that difficult to get credit in the states. Financial institutions are tripping over themselves to throw credit at people over here, whether they can afford to pay it back or not.

Like flan states, I probrably get 10 offers of preapproved credit cards a week, they just go straight in the bin. I could easily get in excess of 10 grands worth of credit on various cards with no credit checks at all. I have 1 credit card with a 10 grand limit for emergencies and it is always paid off, its an expensive way of borrowing money.

Its actually getting out of hand as our consumer debt in the UK has just gone over 1 trillion pounds, financial institutions are under pressure not to hand out credit so readily. With stories in the paper such as, the guy who commited suicide because he ran up £65,000 worth of debt on credit cards. The minimum monthly repayments were more than he actually earned, so there was no way he was ever going to be able to pay it back. With each month interst the debt just got bigger and bigger no matter how much he tried to pay it back.

[shoozleboy]

I take it that you don't have bankruptcy laws over in the UK that are as generous as they are here in the US?

I get tons of offers as well, and they end up in the shredder. (wouldn't want some dumpster diver to get a hold of a preapproved offer and manipulate it so that he was me!)

I keep 2 credit cards on hand. One that I use on occasion, and one for emergencies. I only keep the one because of the zero percent interest for a year... when that's up, I'll just get another zero percent one (They all seem to have that offer now) and transfer over the balance. Many people do that and it saves hundreds in interest charges!

[Craig Tucker]

I think it is fairly easy to be declared bankrupt and have your debt wiped clean over here, in fact quite a few students do it to clear their student loans. I think the laws are due to be changed though to make this practise more difficult.

I have a friend who has 40 grands worth of bad debt, he has not been declared bankrupt, but he has been to court and has been told to pay a certain amount a month, which is an absolute pittance to what he should actually be paying. I think he was supposed to be paying around £500 a month for his debt and the courts have told him he has to pay £50 per month. Basically the debt will never be repaid.

His credit rating is absolutely through the floor, but he has just moved house and got a self certified mortgage (no credit check, you just have to show you can afford to make the repayments) for £142,000.

[Capmaster]

i can't believe you have problems with credit over there - they're giving cash away over here! i repeatedly get offers for loans and cards, they never stop.

Not really. In fact it's so easy people are overextending and filing bankruptcy all the time, in record numbers.

Almost every day I get notices of pre-approved gold or platinum visa cards, pre approved second mortgages. Shows how much they know about me - I don't even have a first mortgage and they're offering second mortgages

It's too easy to borrow here. That's why my advice was to pay cash if at all possible because it's so easy to get into the habit of living beyond your means and getting in trouble

[Craig Tucker]

It's too easy to borrow here. That's why my advice was to pay cash if at all possible because it's so easy to get into the habit of living beyond your means and getting in trouble

Absolutely, I remember when growing up, credit was like a dirty word in our house. We were a single parent family with not much money. If my mum could not afford to buy something for cash then we simply did without. Its far too easy for people to credit these days and many of them do not have the financial awareness to realise when they are making a bad decision. Store cards at over 30% APR, I just don't understand why people have debt on these cards.

I bought a leather suite on credit a few years ago because it was interest free for the first year, so I let my money sit in the bank earning me interest for the first year. The total term of the credit was for 4 years, but after the first years interst free period if you did not pay it off the interest rate was in excess of 30%. A £2000 suite would end up costing in excess of £4000. There are people out there who just dont get this, and sign up for 4 years credit, 0% interst (in small print 0% interst for first year only) for thier £2000 suite not realising how much it is really going to cost them.

[flaninacupboard]

hmm. i have no credit card, spend it once i have it, and have some savings if i get in trouble. the only exception was money i borrowed last year (to buy a car, a widescreen TV and pay for the car insurance (more than the car itself!)) but that will be paid back in november, and i'm still managing to save a little every month.